good morning, everyone. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and steve liesman, in for andrew ross sorkin. investors are awaiting the jobs report out at 8:30 eastern time. a dow jones survey finds that the economy probably added 180,000 jobs last month. the unemployment rate is seen slipping 7.2%. we'll talk more about market expectations in just a few minutes, but we begin this morning with our top story. nelson mandela spent 27 years in prison, led his country to democracy and became its first black president. he died at home yesterday at the age of 95. chris takes a look at mandela's life and legacy. >> history books will remember nelson mandela as one of the world' most prominent crusaders for black rights, the son of an african tribal chief, nelson mandela gave up a comfortable life and his hereditary lights to be a tribal leader to become a political activist in the

fight against apartheid. the system of white rule over the majority black population. >> to feel that it is for us to continue talking nonviolence and peace. >> he was jailed for organizing demonstrations as well as treason and sabotage. he spent 27 years behind bars, but his jailing fueled the fires of freedom. his plight became an international symbol of oppression. international businesses boycotted south africa until the government finally relented and released mandela in 1990. the famous prisoner instantly became a superstar who energized the people and became the first black person to run for president. and with the south african black population voting for the first time, mandela won in a

landslide. the country celebrated and so did the rest of the world. but behind the scenes, there was trouble in his personal life. there was a messy divorce with his wife, winnie, who stood behind him during his years in jail. nelson mandela, whose 9300th birthday was celebrated across south africa and said his proudest accomplishments were his successful attempts to bring blacks and whites together. chris clackum, nbc news. tributes are coming in from around the world. in south africa, people took to the streets to honor the life of their former leader. chris bishop joins us live from johannesburg this morning.

chris. >> well, it's amazing here at the moment. people are talking, people are out on the streets crying, people are waving flags, people are celebrating, people are singing outside mandela's old home and outside of his home in johannesburg where he died, people are gathered out there and they're celebrating the life of the man. everyone from, you know, captains of industry, top politicians, to people in the streets, they've all got a story and they've all got a good word to say for nelson mandela. and it seems that this is the move that is going to go on during these dayses of mourning now that south africa faces. >> thanks, chris. joining us on set, chief international correspondent michelle caruso cabrera. good morning, michelle. >> good morning. clearly, nelson mandela's

greatest legacy is his ability to bring the people of you south africa together and overcome racial divides. but at cnbc, we're aware that economic freedom is important to democratic freedom, as well. you saw the picture of the emergence from prison in 1990. at that point, he is a marxist, he was to nationalize the mines. by 1994, he's a completely different person. he's embraced things like privatization, a good monetary policy to control inflation. he's embracing the controlling of government expenditures, things that the imf today would say, wow, great job. in fact, if you read some liberal leftist logs, many of them are extremely critical of nelson mandela because he tried to out imf the imf. so a pragmatist is a good description of his economic legacy and economic growth

improved under mandela's rule. it's still tremendous inequality in south africa, something they haven't completely overcome at this point. certainly he took major steps, not just political we bub economically, as well. >> 80% unemployment among young people in south africa. >> and i'm sure it's worse among blacks than it is among whites. >> we're all getting a -- we're all reading everything we can on this. what we knew, we obviously didn't know as much about him as we probably should have at -- but, you know, it's amazing with 71 when he got out of prison, 71 years old. really when he was already a transformative person, but -- >> can we brick up a full screen? we can bring up, quote, when he said i was released from prison i announced my belief in nationalization as a counselor stone of our economic policy. as i moved around the world and heard the opinions of leading

business people and economists, about how to grow an economy, i was persuaded and convinced about the free market. the question is how we match those demands of the free market with the burning social issues of the world. >> that is what we're all trying to do is the free market at times can seem so darwinian and unfair and you try to balance out against the pressing social needs, but then you always come back to growth and you always come back to growth is the answer for everything. i heard someone saying if the u.s. could grow at 3.5%, all our problems are solved, no matter who is in office, democrats, republicans, at 2%, none of our problems can be solved. >> although you go back to the point that you brought up about 80% unemployment, about the inequality that still exists, the frustration that exists among all the people who thought

that the black people in africa who thought that as soon as he was elected, things were going to look much better. they would have houses, cars, that didn't materialize. it was a crazy system that set up before that. >> that would have taken a redistribution. >> they did exactly that. >> mandela was somebody who would personally get involved in all kinds of issues. we're going to be speak, richard branson later this morning. he received a personal phone call from mandela asking him to step in and save some jobs by investing in a company. he's going to talk to us about that. he's somebody who saw the plight, reached out on a personal level and tried to make a difference every day. >> michelle, are you coming back? >> i think so. >> because i want to ask you about the south african economy. it is a member of the g-20. it is one of the leading

countries and i know guys have put money into that country who made a lot of money there. >> they're considered one of the fragile five, as we call it. so if we start to see tapering -- right. just like indonesia or india. yes. so that's an issue. >> so either the promise was delivered, but neither the catastrophe that was feared happened in that country when it turned over from white minority rule. >> yeah, no. i mean, i think -- >> it was somewhere in between. >> you're talking to somebody who continued embracing marxist policies -- >> but many people thought the country was going to go all the way down, but that didn't happen. and it didn't happen that -- the social needs versus the free market. >> well, you see, i think he came to learn that it's not about balancing the free market versus social needs, that they often converge.

>> he said he had to balance the fears of the white population versus the hopes of the black population. which -- i mean, the one thing we can gain from this is that our problems here, we sit here and think it's the worst time in history for the warring factions. and i mean, it kind of pales in comparison, doesn't it? >> i would think inequality in south africa is measurably -- >> well, that two parties can't find some common ground. and we're going to talk a lot about it today, but did you see patti moistuurray and paul ryan the way i look at it, they're on the football field, they brought the can out, and you know those things they set it in when they go to kick off? they've got it sitting there. >> it's not lucy with her finger on the ball, is it? >> you don't know. it could come as early as next week if it doesn't get messed

up. >> that is a great headline. >> they're clearly kicking it past the next election. any open government for two years where we're actually have a budget is like nirvana for us now. it's like the promise land, government open for two years, no promises, doing nothing with intiethsmentes, nothing with tax reform, nothing with -- just paying for some, you know, trying to lessi inen the effect sequestration. >> look at the different points on the board. at this point in the game, we'll take that, right? >> and then the other thing that i just wanted to mention in following up on our conversations is what's going on in china? my man. my man. for the democratic party, i'm with biden. did you see, they send him over to china, boom, done. send my man joe over there who is like yeah, yeah, pats a couple can people on the back, tells a couple of jokes, takes

back a couple of things he said and everybody is friends. he does it here, too, but it's already fixed over there. >> we have joe on here. >> carries out the plan and -- blow hardy. you send joe over, boom, done, fixed. thanks, joe, .and then they go out to a club probably. i don't know. anyway, back to wall street's top stories this morning, the november november jobs report current nonfarm payroll, it's 180. do you know the number? you know the number? no, you don't know the number a lot. >> i don't know what you want me to say, joe. >> by the way, thank you for sending me that data on whether minimum wage is good or bad. >> did you? >> yeah. 20 different things. one would sigh good, next would say bad. all of its flawless data. >> great studies. >> you know, i just love economics. i do. >> and i sent you my note that said this is a failure of economics, that even on this one

issue of is the minimum wage good or bad they can't -- >> can't even come close. >> i want you to appoint a high level commission. >> i want to see that, i want to read through it. >> i've been reading these things over the years, but i put it all in one e-mail just to tweak joe. >> did you know germany doesn't have a minimum wage? >> really? >> it has everything else but. >> and people have won nobel prizes for work done on both sides of the issue. >> and not minimum -- i don't know that -- >> and i've told you, it's still better than. >> what? >> privatized. the payroll consensus, 180,000. let's check on the markets ahead of the 8:30 report. let's quickly check on the futures up 1500 points. oh, the other thing i wanted to say -- >> but it's been five days down. >> yeah. yesterday, it was the worst of

all worlds, steven. because we got 3.6. it's like, oh, crack, they're definitely tapering. but then you think but it's good, it's 3.6%, the markets will go up. no, it's going back to 1% next year. >> remember, i said that on set and that's exactly what morgan stanley did. >> but you couldn't take solace that it's good for the economy. it was the seinfeld argument where he throws everything out the window and says everything comes back even to me and takes out an old jacket and there's $20 in the pocket. >> but 2% stinks. we need better than that. >> you get 3.6 and 1 and what does it average out to? 2.3 or something like that. >> but the fed knows that. >> i think that's the way if fed feels, although i think they see a modest strengthening.

>> it's higher than it was, but i think january is better. >> we should wait and see what the numbers say at 8:30, but i still doubt that december is the date. >> where was the glut of wall street? here it is. glut of wall in the gulf coast. we'll take a quick look at the journ journal. glut forms on the gulf coast. we're back to 97. ten-year, make it to 2.9%? no. 2.865%. getting there. the company is paying for davos, right? i don't have to worry about -- and it's not euros. is it franc? >> it's swiss franc. >> they're about to do the swiss banks have to decide which way they're going. we're going to talk about that in the executive edge. and 1.36, geez, almost 1.37. finally, gold, i guess it recovered a little yesterday. i thought it was down more than that. time for the global markets report. karen tso is standing by to bring us that in london. karen. >> joe, good morning. thank you. we have some selective gains

across european markets today. somewhat of a recovery trade after a sell-off yesterday. but the number one theme is all about fed tapering. so huge focus here, too, on the nonfarm payrolls report in a few hours time. and we are seeing some just rift off the highs of the session. you can see we were firmer early on, but we're still ahead by 0.3%. tracking higher in the uk and firmer, too, in some of the other markets. the ibex has been the exception. we're down 0.6% on the spanish stock market. it is the underperformer here in europe. there's been some real key trade going on there today. right at the bottom of the smi, you may know this stock because it is the company behind some of those sweet smelling fragrances that go into soaps, deodorants, perfumes, responsible for some

of the big flavors out there in packaged gs goods. we've heard today nestle launched some of its stake in givaudan. givaudan has dropped 3.4%. nestle, on the other hand, is up 1.25%. but the speculation about what this means for l'oreal, shares up 3.3% in trade. let me show you foreign exchange markets. we've been talking about some of those eagle eyed investors now watching what the dollar trade is. traderers were saying we were trapped in the range for most of the week. and the focus and direction will come today when that hits the tape. so far, we are seeing a drift off that euro/dollar trade. perhaps this shows us the direction of sentiment already because it was a very strong pop yesterday on the euro after mario draghi continued to juggle those policy tools out there. so 1.3669 for the dollar/yen

rate. 103 was the level. 102 is the handle right now. we had the autumn statement by the chancellor yesterday showing us the momentum really is behind growth here. so we are holding currently, but this may all change as we get that jobs print coming out stronger than expected. the australian dollar has been under enormous pressure. 90.5 is the level we're seeing on the boards. back to you in the studio. coming up, becky isn't the only one who fears the iphone's wax of the keyboard. could ryan seacrest have a solution for her? we'll find out unbelievable. he's nfl, he's "american idol," he's doing that game show, he's designing keyboards. >> he's a busy man. he's talking to yahoo! about potentially doing a new year's eve thing for him.

>> did you see when he signs things for a contract for radio? a two year deal for 50 million or something. we have to get him on. >> biden and -- >> we're going to have a problem in 2016, aren't we? you're backing hillary. on the democratic side. i'm backing biden. i'm not backing him all the way. >> i think it's time. >> for hillary? for a woman. >> we're going to be point/counter point. >> and we're doing it now and i'm squarely in the middle. >> i like biden. >> he can get things done. >> i like hillary, too. >> i'm backing him on the democratic side. >> what does that mean? you're back him as the worst possible candidate so the democrats win? >> i did that last time and look how it worked out. i got eight years. thanks. first, we're talking about the weather. flight cancellations, power outages across the south and the midwest. oh, my.

alex wallace is joining us from the weather channel. that's a colorful screen there, alex. >> yeah. you know, guys, colors on these maps, that's not a good thing. that means we're talking wintry precip. we have everything from snow in the blue to the lighter shade of the the pink/purplish. we have a mixture of freezing rain here. this is the dallas/ft. worth metroplex. this is a slew of precipitation types which is not good news for folks trying to get out and travel for the day. we've been talking about power outages in some of these areas, as well. look at the expanse of all this. this tracks from the southern plains up into the seconds of the ohio river valley, as well. so we've got the snow. a stripe of about 5 to 8 inches hugging that valley. even getting into portions of northeast. pittsburgh right on the edge. generally 5. but getting into parts of new england for lighter snow expected through the early parts of the weekend. but the main concern, the icing. greatest potential for a quarter

of an inch or ice or more anywhere in this purple includes dallas up to louisville. that's a key because. when you start to get above a quarter of an inch, tree limbs start weighing down on power lines and power out aemgs become a problem. so power outages & and travel will be treacherous. that's your national forecast. more "squawk box" coming up next. every day we're working to be an even better company - and to keep our commitments. and we've made a big commitment to america. bp supports nearly 250,000 jobs here. through all of our energy operations, we invest more in the u.s. than any other place in the world.

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time now for the executive

edge. this is our daily segment focused on giving business leaders a leg up. switzerland's private banks face a monday deadline whether to bow to u.s. pressure and change the centuries of culture of banking secrecy. many are waiting until the last minute to tell the financial regulator whether they'll participate in the program. the banks risk fines and handing over client information if they do go ahead with settlements, but the banks who don't settle risk future u.s. prosecutions. >> they're very neutral. they are neutral. >> they say it's a big situation of gain theory being played out, waiting to see whether the rest of the banks -- what they're going to do first. if you get singled out, it's the only one who doesn't go ahead and settings. >> i would miss the end of the age of the swiss bank account where you can say you have a swiss bank account. >> you've never had a swiss bank account. >> no. we have ubs because ge had something to do with ubs. so i like ubs because i was a

swiss bank account. >> do you think people should have a right to have a secret bank account? >> if you're not breaking the law? >> well, you are according to u.s. regulators. >> well, if you're not breaking the law, i think it's -- >> you are breaking the law in the united states. >> so regulators have what right to know that you have a bank account? >> look, i think the global financial system is getting more and more tied together. you need to be able to reach to all places. you can't have pockets where you're hiding things, particularly in an era of terrorism. you can funnel funds back and forth. that's a huge issue. although the u.s. hab coming after this from the tax perspective. >> but, becky, is regulation catching up with globalization? >> exactly. >> the finance and business globalized regulation did not. so this ability to move capital around means that government really can't keep up with it unless you have rules like this, which is no secret bank accounts. >> right. >> you know the true zealot on

the anti-taxation side of things -- and no one wants to break the law. there's tax avoidance and there's tax evasion. >> you're riding things in a swiss bank account and makes sure no one knows about it, you're probably doing more than tax avoidance. >> i'm not looking into the mind. i can't read the mind of people that do things like that. >> but a secret, if you need to keep a secret, you don't care in the nsa reads your e-mails because now you don't have anything to hide. >> so now you're switching sides on this issue? >> i guess. i don't know. i'm playing your role. i'm going to argue both sides of the issue. >> was the supreme court justice in the past that said it is my patriotic duty. >> but i understand the tax idea of tax avoidance is better than -- >> that sounds like it is not tax avoidance, that is tax

evasion. if you're avoiding the taxes, it should be able to with stand -- >> it might be satisfying just to do it so they can't see. even if you're not breaking the law. >> by itself, it doesn't sound that bad. but when you combine it with the nsa reading the e-mails and you get into the long arm of the law -- >> no, i'm in favor of this. i'm in favor of the fed going after this because i think in order for taxation to work, that everybody should be held up to the same laws. you can find about what those tax laws should be, but you -- whatever the law of the land is what we all have to live under that rule. >> we have people in congress now that are -- that want to make -- they don't care where the u.s. companies are. it's almost a punitive. they look at apple and the way that -- >> but these are individuals who are hiding money over there. >> but this makes the end of every hollywood caper not true any more. the idea of the guy who does the

crime and escapes to the -- >> that is my point. >> you would to live in a world where -- >> can you imagine that? >> well, people quit the game of tennis. they all a live in monte carlo. if you don't have a swiss bank account, then -- >> i don't know. but all those movie res done. the cayman islands. ryan seacrest has invested in a start-up that makes a keyboard accessory for the apple iphone. the gadget will make its debut at the consumer show in vegas. i've already seen one. bobby kodack was here. joe, you were out that day. it was the coolest things in the world. it's like this case that goes over it. it adds a blackberry keyboard right at the end of it.

i am going to be one of the very first people to buy this. i used it. it worked great. >> i can tell you something. i went into the city last night, i had to for something. but i got in an argument with someone and i was dictating on the iphone. and i'll show you the messages that i dictated, big words. >> but then the guy who was driving your car heard everything you were saying. >> he did. >> there are times and places where you don't want to be dictating everything into your phone. >> i hope he's not a die hard warmist. i said things like orthodoxy. and it picked up everything. it picked up everything that i said perfectly. >> really? >> paragraphs. i could have never -- even on a blackberry, i could have never composed these -- >> did it capitalize the words while you were yelling? >> it was a stream of conscio consciousness. there weren't periods and -- and curse words.

corporate curse words. >> voice capture does not work so well. >> even the curse words that you don't know if it's one word or two. >> it's the greatest things. it works perfectly. >> i'm done with keyboards. >> ", man. >> i continue to struggle with the virtual keyboard on my z-10. >> you're worse than i am. >> i have the new blackberry. >> you have the worst of all worlds. >> and that has the best virtual keyboard out there. >> you have a blackberry with no keyboard. >> he's worse than i am. if i'm going, i'm going to the iphone. >> it works. it's a good tool. >> see how much longer it works. >> that's the big question. >> i can tell you on my iphone, i had ways which got me where i needed to be on time. can you get ways on -- >> no, i don't have ways on the blackberry, but i am going to

have it on my new iphone that has the keypad that right sea crest is making. >> that thing i was talking about came. >> one more story quickly, if you think there is a different bitcoin story every day, you are correct. an article in the "new york times" looks at the fraud. the story looks at a pump and dump scheme. a tweet went out reading for insane profits, come and join the pump and dump. or i think it was called come and join the pump. he operates with fear of crackdown because he says there is no government regulation and that makes it like the wild west. >> yeah. i don't know what -- is bitcoin like the internet was like the first time you heard about it? >> i don't know. we've been very skeptical about it. it sounds like a big pyramid scheme to me. but i got an e-mail last night who said we need to have somebody on that understands bitcoin because he said mainstream meets ya is missing what's going on.

i'd love to her his thoughts about it, and i e-mailed him back. we'll hear from him later today, hopefully get him in here soon to talk about it. when we come back, we'll be talking expectations right after this. and then later, our newsmaker of the morning,fy philadelphia fed president charles plosser will join us at 8:40 eastern time. first, as we head to a break, take a look at yesterday's winners and losers. i have low testosterone. there, i said it.

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welcome back, everybody. joining us right now, john lonski. those numbers yesterday shocked all of us. the third quarter gdp, big, big gain. we have seen better than expected adp numbers. what does that make you think we're going to see today? >> we have jobless claims. a downward bias because of the thanksgiving holiday. i think it will be around 200,000 new jobs, lower unemployment rate and that would, of course, increase the risk of an announced tapering at the december meeting. but most likely, that announcement will not come until the first quarter of next year. let's not forget that inflation is very well contained.

pce price index inflation is about 1%. the dollar is doing pretty well. the fed has plenty of leeway. it has the luxury of studying the data more closely before launching a tapering. >> that's an excellent point. the inflation is very well contained. that's exactly what bullard said when he was here on set. he's a guy who is really hawkish when it comes to any inflationary signs. >> inflation is so well contained that i think we're running into pricing problems during the current holiday shopping season. businesses have lost a lot of pricing power to what has been very much below trend, below average income growth. we're getting good numbers on jobs growth, reductions in the unemployment rate. however, the rate of growth of income lags that of previous recoveries by a wide margin. look at the situation with autos. great month in november for auto sales, yet there's the stock

prices of major automaker ves softened because of worry about excessive inventories putting downward pressure on car prices. >> instead of using the terminology increases the risk of a taper, do you think you can start saying things like would increase the possibly and the opportunity of extricating ourselves from this horrific situation the fed -- do you see what i'm saying? you're acting like is a bad thing to get out of this quagmire -- don't call it a risk. >> somebody said this morning in the 5:00 show, the dangers of strong job growth. and what he obviously meant was the danger to the bond market, but he forgot to add that. >> the danger of possibility. >> the irony is, that's exactly what you saw when the strong adp report came out earlier this week. you saw the market sell off for fear they were going to initiating tapering in december.

>> are those the people that we want controlling where the market goes, what every dime they can get from the punch bowl? >> the short-term major free action is just that. if you look down the road -- >> down the road, that's where you want to look. i'll give you ten bucks of qe for a dollar growth. >> janet yellen will be taking over the chairmanship of the fed in january. it is likely that she will pursue hawkish attitudes in the wake of employment pressures. we've lot 3.25% for the unemployment rate since the financial crisis. so labor participation rate has declined by 3.25%. so everything that you're seeing as far as the unemployment picture improving, it's been completely offset by disinfranchised workers.

>> that's not 100% accurate, though. >> apples to apples on the 3%. >> and it's not just disinfranchised workers. there are people retiring and more and more baby boomers. most of the data we've seen shows it's about half .half. >> and assuming after your report yesterday that the guys collecting the data left their home during that period to see if they can go out and -- >> the incidence of this was very small, just to be clear. >> you don't know that. you saw what those guys looked like on a rainey morning. they open eed their eyes. they call the supervisor and they wake him up. >> like the guy that delivers a thousand flyers. >> i did it, boss, i did it. >> i gave them away. >> i do remember dumping those when i was about 111 years old,

clogging up the sewer. >> the ten-year back at 2.88%ing on something like that. how much is the market pricing in the idea that the taper is going to start sometime between january and march? >> i think it's in. i think when we look at it a year down the road, it's not going to be surprising if the ten-year treasury is actually at or below what the current yield is, even after the taper. so i think that's going to be the surprise of the taper. if you look at periods where the fed has been operating in a quantitative easing mode, stocks have done extraordinarily well. bonds have not done so well. the bond rallies have occurred when the fed has taken their foot off the gas and tapped on the brakes. so i wouldn't be surprised if post taper we actually see interest rates coming down and stock markets soft -- >> you're negative on the underlying economy, it sounds like to me. >> we have a bifurcated economy.

we have the haves and have-nots. i'm a pretty conservative guy. but the reality is we have a lot of our population that's not participating in the asset growth that we've seen over the last -- >> it's hard to do at 7.5% unemployment. >> absolutely. if you own a home or you're invested in the stock market, you're feeling pretty good right now. >> if you're working at a fast food company, you're going to see pushing for raising minimum wage. >> that's exactly right. but the one thing i thought you said that was positive is maybe these ranges are not official. if we're supposed to be at 4%, it's a problem. if we're supposed to be at 2.85%, it's not so hard to get out. i'm saying based on the underlying economy, maybe it should be 278% based on the

process. >> we have to go through this process of the bond market. a slower economy would bring the ten-year treasury yield back down to a range of 2.5% to 3%. >> what's the right ten-year right now, steve? what would it be based -- if there was no -- >> i don't think it would be much higher. joe, here is the thing. when you criticize fed policy, what's the worst equilibrium? the idea that unemployment is at 7.3%, which is two or three points above where it ought to be, or the idea that the fed balance sheet is $4 trillion. >> don't forget, it's 12% if you add the people back in. >> if you're the fed -- i mean, if you look at the world and you say, what is worse, that i blow my balance sheet up or that i keep my balance sheet the same and live with the higher unemployment rate, they look at the world and they say it's worse that people are unemployment. so, therefore, they take action. >> helped at all. >> but both are artificial is my point. choose your artificial reality. >> why even risk the negative?

>> the fed thinks it may have helped avoid recession this year. we have a case steady allowing you to -- the bank of japan has engaged in various forms of qe for years. the bank of japan assets are much higher than fed assets as a percentage of gdp. yet japan for many, many years suffered from price deflation. so i think we might be exaggerating the risks. >> that's been a huge lesson of the last five years is the way that the -- a bigger balance sheet has not created inflation. >> we've had self-help on the entire planet. >> it's changed economics as we know it. it would rise this way and we would not have devastation.

>> if government to debt gpp just increased, that's the story. >> thank you so much. >> guys, thank you both for coming in today. it's great to have you on set. coming up, progress out of washington. let me say that again. progress out of washington. a little bit, but we'll take it. we'll talk about the prospects for a debt deal next. plus, why incident vesters are checking out on eddie lampert. "squawk box" will be right back. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action. tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending. tdd#: 1-800-345-2550 and seasoned market experts to help sharpen your instincts. tdd#: 1-800-345-2550 so you can take charge tdd#: 1-800-345-2550 of your trading.

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in washington news, we talked about this earlier, budget negotiators are said to be down to the final, most difficult items in the two-year budget deal being negotiated by senator patti murray and congressman paul ryan.

aides say the install scale agreement would lead to less than $100 million in new savings, it would be a mix of fee revenues and pension cuts to help reduce the deficit, help ease the sequester. from reading the take the journal has, they're pretty close. there's some issues remaining, but it could come as early as next week. we still have people coming in and talking about -- >> you've read that headline before, joe. down to the last most difficult item. >> these are small items, though. we're not trying to do anything. i think both sides, we're agreeing to disagree. this would put us past the next election. we will be through another election to see -- you know, to get another chance to vote on it. >> yeah. >> in wall street news, reports say eddie lampert is facing an

exodus to his hedge fund. lampert has reduced the reduction technique before. we should point out that just this morning, the news has become officials. lands' end, that spin-off that we've been talking about from some time for sears holding, it, look like the board needs to make a final stage, but sears holding has filed this registration statement saying it is looking to go ahead and spin off lands' end. the stage at this point says sears holding bought it back in 2002 for $1.86 million. we'll see what happens as they potentially look at spinning that back out. coming up, we're remembering the life and legacy of nelson mandela. ines? okay, who helps you focus on your recovery? yo, yo, yo. aflac. wow. [ under his breath ] that was horrible. pays you cash when you're sick or hurt? [ japanese accent ] aflac. love it. [ under his breath ] hate it.

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how much can you tell us about -- about nelson mandela from your perspective? >> joe, it's very interesting to observe there is the legacy of mandela. this is a society which was highly divided by apartheid. now you have a system where the economy does integrate plaques and whites and other groups in south africa. it will give us the bitter legacy. it's also as a result of much of the rest of africa. it was hard to imagine a 30 or

40 yearsyeah. brian, you were fortunate enough to know the man pretty well just from both business and public service, right? >> yes, you're very right. and thank you very much for having us all on the show this morning. first of all, my condolences to all the people of africa and, indeed, the world. we've lost an akiconic leader w in his presence you're dignified where he went out of his way to make you feel so important. but, indeed, south africa has a lot of work to do going forward. and, the legacy which nelson mandela had created and the platform he has created, i think the new south africa is very much focused on driving the economy forward. >> brian, in knowing the man and being around him, the more i think about it, you spend 27 years in prison and you get to

the age of 71 just in general in terms of wisdom and experience dealing with people. and he came out and was able to really pragmatically look at everything that needed to be done, almost without any ego or without any ax to grind in other words and to see what the most positive outcome could be and how to get there. and we don't have many people that do that anymore. is it age? >> no. >> is it how he started? sitting there for 27 years and thinking? or what is it? >> you must realize that president mandela was the world's greatest diplomat. when he was sent to prison the first time he was head of the youth wing. but when he came out, he preached peace and reconciliation. president mandela viewed that as a tactic, unlike ghandi or martin luther king who looked at this as a strategy. but this was a tactic, and

nelson mandela was very much the world's greatest diplomat. >> yeah. >> i came across him -- >> i'm sorry. >> i came across him in other forms of diplomacy when we needed a very silent but powerful diplomat to bridge great gaps in some of the emerging challenges within africa. >> all right. gentlemen, we've got to keep it short today. we're going to be talking about it all morning long. we appreciate your input this morning. it's time to slip in a quick break. in the next half hour, we'll talk to richard branson who works closely with nelson mandela. we'll be right back. and we've made a big commitment to america. bp supports nearly 250,000 jobs here. through all of our energy operations, we invest more in the u.s. than any other place in the world. in fact, we've invested over $55 billion here in the last five years - making bp america's largest energy investor. our commitment has never been stronger.

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good morning, everybody. welcome back to "squawk box" here on cnbc. i'm becky quick along with steve liesman. the futures are up big, up by about 75 points for the dow futures. s&p futures up by over nine points and the nasdaq up by about 15 points. in our headlines this morning, we are about 90 minutes away from the november jobs report. economists are looking for 180,000 new nonfarm jobs to be added. that would be down from 7.3% in october. investors have been reacting negatively on data on concerns that will lead the fed to start tapering its bond buying program sooner rather than later. sears has filed with the sec to spin off the lands' end clothing business. it was considering a spinoff back in october. the transaction is subject to approval.

the company's board of directors. and keeping an eye on commodity prices today. below normal temperatures and ice in the midwest and southeast is threatening livestock. agricultural economists say the weather could also lead to transportation problems for those commodities. we'll have more on the cold snap in a few minutes. the world is remembering nelson mandela as one of the greatest crusaders for human rights. mandela died yesterday in south africa at the age of 95. cnbc africa correspondent chris bishop joins us. chris. >> thanks, joe. well, here in johannesburg the details are starting to emerge about what happens now. what's going to be the way forward over the next week or so. and it appears it's going to be up to ten days of mourning for nelson mandela. the body which is still at the family home in johannesburg is

likely to lie in state for three days of petoria, the capital of south africa. on monday, the football stadium in johannesburg, there's going to be a massive memorial service as we've been speaking today, there have been plenty of church services across south africa to remember the man. and it's likely that the burial will take place somewhere around december 14th. and this will be in the eastern cape, the small village where nelson mandela grew up. so aside from that, the numbers are still gathering. the complete strangers are dancing together and singing and waving flags, children laying their school blazers on the ground. as a tribute to the man. and it seems the country is in a fairly sort of celebratory rather than a somber mood at this time.

we're getting more details later. so back to you, joe. >> thank you, chris. appreciate it. cnbc africa's chris bishop. and more on the passing of nelson mandela coming up shortly. we're actually going to talk to richard branson. he's going to join us in the next couple of minutes live. he was close friends with nelson mandela. even did some business deals with him. and we are looking ahead in addition to this, we've been looking forward to jobs friday. the jobs report comes out later this morning. gary stern is former president of the federal reserve bank of minneapolis. he's going to tell us what we're going to see in these numbers and what we've been through. and arthur brooks, president of the american enterprise institute is going to tell us how we can get to 400,000 jobs a month. before we get -- because it's enterprise, steve. it's enterprise. >> i thought the government created all jobs -- all jobs led

back. >> how many times have i said that's no the the case? >> you've been trying to tell me. >> you spent seven years in the former soviet union. >> right. where as i've said many times over the last seven years, i learned to be a die hard capitalist. >> no, you didn't. >> i assure you, joe, when you live amongst the failures of communism, you become a capitalist. >> i don't know what you were before that. steve's going to tell us how the fed is going to look at the jobs report. and we'll have a lot to talk about. yesterday, what do you think it really was? >> no, i think that's a reasonable number. it obviously is swinging around because of inventory accumulation and so forth. >> maybe i was wrong, what's the basal level? >> well, i think the recovery has obviously been disappointing to date. it's probably somewhere stuck in the neighborhood at 2%, 2.5% at best. i'm more optimistic about it for a combination of reasons. and i think, in fact, if you look at the economic news over the last 12 plus months, the

preponderance of the surprises have been modestly on the upside. that is, the economy has done a little bit better than i would have expected over the last 12 to 18 months. it's, you know, i think that's all to the good. it's still been a disappointing recovery having said that. >> you have comments that you've written out on this? >> yeah, you blew me off. i'm not a little bit insulted at all. >> i know i'm coming to you now, i see it's in the prompter again. >> i want to be very precise about what i'm saying. >> what's the word? precise? >> precise. >> i don't do that too much. >> how the fed's going to look at this number today and going to be watching the unemployment rate for two reasons. first, fed officials don't know what to make of last month's 700,000 plus plunge in the labor force and the employment level in the household survey. this is going to be -- you know, look to this morning's report as a truer measure of the unemployment level and rate. second, officials are very interested in how the market

reacts if it's positive. and the interest is most keen on the short interest rate side. not the long interest rate side. here's why, what they want to see is if short rates remain well behaved amid good economic news. to gauge how much the market believes in the pledge to keep rates low or near zero for the next couple of years. the fez had fought this constant battle. we've been talking about it for a long time, tapering is not tightening. when short rates rise, it tells the fed the market is not buying. >> and it hasn't been buying it. >> look at that. look at the celebration where the yellow line has gone up. that's the longer rate. and the white line has maintained and the curve has steepened. that's a sign to the fed that they've made some progress here. and that's really what they're going to look at. now, if it doesn't work, if that rate goes up, then -- >> the two-year. >> the two-year, or especially the fed funds futures which we don't show graphically there. then the fed may take additional action. it could lower the interest on excess reserves. it could buttress the guidance

in some other ways. >> and the banks have been opposed to a lot of these measures. lowering -- >> 25 basis points. the bottom line is this. >> that's the rate that the banks get paid for keeping excess reserves. >> 25 basis points, they couldn't go down to 10 or 12. the bottom line, the fed is very committed to this communication strategy that it can reduce the amount of quantitative easing out there, but that should not change where the fed -- when the market believes it'll raise interest rates. >> does it have a hope and prayer of making that happen? >> it has a hope and a prayer. but i wouldn't place a lot of money on it. and the reason is, you know, unemployment at 7.2% or 7.3%, obviously the fed remains very concerned about the labor market and about the pace of the recovery. but it wouldn't take a lot for us to be sitting around a year from now and looking at an unemployment rate .7 or .8 lower than it is. and if that were to happen, you would have gone through the

fed's threshold. it's a threshold, not a trigger and we all understand that. you know, in the world of forecasting and conditional policymaking, there can be surprises and sometimes the surprises are on the positive side. certainly a more rapid decline in unemployment would be a good surprise. >> well, at this point, all we're -- god, it's nice our entire economy is based on what the fed is doing and what it isn't doing instead of the private sector trying to, you know, shake off the shackles of all this stuff and do what it's supposed to do. given the make-up of congress and the executive branch right now, can we ever -- no matter what the fed does, do we ever get above 2%, 2.5%? >> it's hard to do. and the key thing to keep in mind, we're looking at growth rates this quarter of 3.6% or whatever. and it's true, it's involved with inventory and what's leading to this. the key thing to keep in mind, this is not one growth rate. it's a high growth rate in the top half of the economy and low growth rate in the bottom half

of the economy. we're experiencing asymmetric recovery. and people are getting hammered and they're not getting better. that's the point. >> well, the president's going to take care of that. >> exactly right. and as long as we have this unbelievable uncertainty in everything we're doing about creating jobs, we're going to continue to leave people behind and keep talking about how to expand food stamps, this is a problem we have with the -- >> what about the minimum wage? i said he's going to -- he genuinely wants to try to address this. but i don't think he knows how counterproductive some of the things he's doing are to -- >> i don't know if he does or doesn't. look, he's unwilling. the administration, no the the president, the administration is unwilling to do things we need to do to have a pro growth jobs policy in this country. >> you're saying that giving more people food stamps keeps them unemployed. people are not working because of the food stamps? >> no, makes us not worry as much about their plight. 32 million people on food stamps in 2009 to 48 million today

while the stock market has gone up by 108%. >> looking at the minimum wage is another way of addressing just the edges of the problem and not really attacking the root causes of any of these things. >> absolutely. >> the idea -- i think it's 25% of people who work in fast food restaurants are raising children, trying to raise children on those wages. that's a problem. you need to train these people so they can get into better skilled jobs. >> exactly right. >> they're still going to be hamburger flippers. >> but 25 years ago it was teenagers with those jobs. >> and hamburger flippers can end up managing the restaurant. >> i get that. what about the time in which they're flipping hamburgers? what's the right wage for them? >> would you rather have 50 of them flipping hamburgers or 30 of them -- >> but that's the question. i think it takes the focus off of the real problem here which is we have -- >> that's right. >> high-level jobs we are not training people for. >> and there's another point here, too. the whole idea, there should be

a minimum wage. >> sure. >> but if you want to hurt poor people and throw them out of work and make sure you don't create the jobs, especially for young people who are relatively unskilled, doing it with a minimum wage is exactly the wrong way. we're going to talk about it later. there are better ways to do that. might be more expensive and uncomfortable, but we have better ways. >> you want to weigh in? >> yeah, i do. i think joe started by saying this obsession with the fed seems to be misplaced. i agree with that. we have a huge complex, sophisticated economy. and to think that the federal reserve or any other policymaker in washington can have a profound influence is, i think, mistaken. i think on the margins, good policies help, on the margin, bad policy hurts, but it isn't going to change the nature of the ball game. and, you know, we're -- in my judgment, we're living in a rinehart world, that means growth, and it has meant for four years. the evidence has accumulated and seems like they're right. four years of recovery as they predicted, it's been

disappointing and sluggish. >> you didn't get the memo. once they said that debt didn't matter, everybody got rid of rinehart. >> but that wasn't the important point. >> threw him out. >> i understand that. >> up next, more on the passing of nelson mandela.

welcome back, everybody. this morning, we've been talking about the passing of nelson

mandela. joining us live on the "squawk" news line is sir richard branson. joining us this morning. and richard, we know you had a personal relationship with nelson mandela. can you tell us a little bit about how you first met him when he first reached out to you? >> well, i was fortunate enough to get to know him quite soon after he left prison. and work with him on a number of projects over the years. i think the most important, of which, he decided about three or four years ago to create a group of elders so his life was not wasted and that his life could live on for many years after he was gone. so he pointed the 12 most respected men and women that -- in the world that he -- in his eyes. people with high moral authority.

and he gave them instructions to get out into the world to speak out on issues they felt strongly about. and also, most importantly to try to resolve conflicts in the world. and the elders have been doing that and they will continue to do that for decades to come. and very much doing it in nelson mandela's name. >> you know, richard, we've talked this morning about his evolving idea of the economy, free markets. when he was younger, he was a marxist and socialist later in life. but he said when he came and was out of prison and started talking to world business leaders, economists and seeing how things worked in the markets that he started to embrace the idea of free markets, are these conversations you had with him too?

>> yes, i think he embraced free markets, but he felt that business leaders needed to be incredibly responsible and the way they used their wealth and wealth must be, you know, with wealth, comes great responsibility. and and, you know, and that people who are wealthy are also fortunate. and therefore, you know, if nelson mandela came to lunch with you, he would -- you know it would be very expensive lunch because he was always trying to get money off the rich to give to the poor. and, you know, i remember one particular lunch where i actually thought i'd gotten away with it. and when we got to the tea the coffee, you know, he turned to me and said he'd had lunch with bill gates the day before and he'd given him $15 million for a particular cause and i realized i hadn't gotten away with it.

and so, quite rightfully, he agreed in capitalism and free market economy. but he felt that business leaders needed to, you know, be great leaders. and to be forces for good. and, you know, that's something which i think all of us business leaders need to take on board. >> are there other lessons that you learned from him? and in particular, any other particular projects you worked with him on? >> well, i think another project we worked with him on was the 4664 campaign, 4664 was the number he was given when he was in prison. he did not believe that ex-presidents should speak out

on issues or get involved in politics. but because the south african government was letting hundreds of thousands of people die unnecessarily from aids, he decided that he needed a massive concert in south africa and to give himself a platform to speak out once on an issue he felt was dreadfully wrong. and through that concert that south african government changed their approach. they accepted that aids was a reality. started giving people antiviral drugs. and a lot of enormous amounts of lives saved. and, while he was doing serious things, he also, you know, you know, he was in a small group of people. he would dance, he would laugh, he would -- he would smile, he would sing.

so, you know, so there was this steamy side of him that was trying to, you know, help make a difference in the world and then there was the very human side. >> sir, richard, we want to thank you very much for being with us this morning. we've been talking about nelson mandela all morning long. that's sir richard branson. when we come back, we have a weekend forecast that includes a deep freeze. we'll be right back. just by talking to a helmet. it grabbed the patient's record before we even picked him up. it found out the doctor we needed was at st. anne's. wiggle your toes. [ driver ] and it got his okay on treatment from miles away. it even pulled strings with the stoplights. my ambulance talks with smoke alarms and pilots and stadiums. but, of course, it's a good listener too. [ female announcer ] today cisco is connecting the internet of everything.

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a winter blast hitting much of the country, record cold temperatures across the plains and people staying inside while the threat of an ice storm from dallas to memphis has residents preparing for possible power outages. the weather channel's jim cantore is in dallas with more. jim, how is it there? >> reporter: yeah, it's pretty nasty. a raw day in dallas, the upper 20s, the winds are blowing out of the north at about 25 miles per hour. we've got moderate sleet coming down. and that actually may be our saving grace here. these little pellets that come out of the sky of sleet don't tend to accumulate on trees and power lines.

however, we've had at times freezing drizzle, as well, and that's been the biggest issue here. the roads are actually pretty decent if you don't go too fast. but notice this pin oak here with the leaves still on it. huge area of ice accretion. a tremendous area of weight added to the tree. the wind is pretty much the kicker in what eventually takes the trees down. we've got 130,000 now without power. and considering this is a metro area of about 6 million, that's not too bad. but i think as we go on through the day and this continues, we've still got a lot of power outages to go, guys. and there's another round of freezing rain on the way for arkansas, for north texas, for ohio, kentucky, tennessee, missouri. all of the areas will get it again as we get into sunday and the northeast where you are, we will probably see it, as well, impact you. more likely rain for the big cities. but what a contrast yesterday. a record high of 81 in

charleston, south carolina, when we had a record low in portland, oregon. it's really driving this whole thing. 800 flights canceled, 800 school closures here, they obviously want everybody to stay home here in the big "d." tonight's forecast low, 17. so we've got big problems here. back to you. >> jim, how big of a problem is it that this is happening when the leaves are still on the trees like that? couple years ago here in the northeast, we had that storm that came right around halloween. >> right. >> it was a problem because leaves were still on the trees. >> reporter: right. what you've got now instead of just having a branch, you've got a whole leaf that's also acreting the ice. so that's a huge problem. that just adds more ice and weight to the tree. we're going to see more power outages here, guys. >> an economist is asking me whether or not some of the big shipping facilities for the shippers are in the impacted area. the fedexes of the world could affect holiday shipping.

>> reporter: well, you know, u.p.s. is in memphis. that's going to be, i think, an issue. going to get into the ice later today and on into tonight. and everybody's going to go into this deep freeze here. so this event is going to lag right into the weekend and early next week, especially with these power outages. >> jim, thanks very much. >> reporter: any time, guys. still to come, the november jobs report. the fed will be watching the numbers closely. we'll have the numbers for you at 8:30 a.m. eastern time. up next, the $15 minimum wage debate. what would be the affects on companies. we'll talk about that after this. to help secure retirements and protect financial futures. to help communities recover and rebuild. for companies going from garage to global. on the ground, in the air, even into space. we repaid every dollar america lent us. and gave america back a profit. we're here to keep our promises. to help you realize a better tomorrow. from the families of aig, happy holidays.

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welcome back to "squawk box," everybody. in our headlines this morning, investors looking ahead to the november jobs report. that's due out at 8:30 eastern time. economists are expecting 180,000 new nonfarm jobs to have been created. also, an unemployment rate to drop to 7.2%. the government also out with the delayed reports. we're also watching shares of jc

penney today. the sec sent a letter to the retailer seeking more details on the liquidity, cash position and debt as well as the late september secondary stock offering. that offering was at the center of a shareholder lawsuit. and australian airline faces an uncertain future. after an unexpected first half loss followed by a downgrade of standard & poors. quantas has asked the government for help. president obama says the minimum wage should be increased but could a mandatory wage hike do more harm than good? that's -- i'm sorry, jared, that certainly is sort of a leading question. and i want to talk to you seriously about it because i read your stuff. and i've been making points recently, jared, you might like. jared bernstein, the senior fellow at the center for senior budget policies, also former chief economist for my hero, joe biden. >> another great joe.

>> joe, we sent him to china, it's done, boom, 24 hours, everything's fine. right? pats a couple people on the back. i don't know. we need more joe. i'm backing him against -- becky's backing hillary. anyway. here's what -- i like what you say, jared, because you're smart. you make the point that -- >> this is feeling a little bit like a set-up, but go ahead. >> it is. no. because you make the point that it matters how much you raise the minimum wage. >> right. >> i've said, okay. let's make it $100 an hour and see whether that does anything. and you do a thing where you go up to a certain point where it's beneficial. and beyond that, it could actually hurt job creation, right? >> right. that's precisely what i believe the evidence shows. and i was listening to your conversation earlier, much of which i found very interesting, especially about the economy. but on the minimum wage, i do think it often gets discussed in much too sweeping a manner because there are very different

proposals that historically the proposals that have been enacted have been moderate in the following sense. they've never affected more -- i shouldn't say never because there's been so many, but as far as i can tell, they've never affected more than 10% of the workforce, the lowest 10% of the workforce. and the president's proposal, i think, does meet that criterion, don't seem to have the broad job loss effect some of you were complaining about. that doesn't mean nobody loses hours or a job, it just means that the beneficiaries far outweigh anyone who was hurt. >> the money in the pockets of the -- of people that can now spend it. and this is the point i've made, jared. we've looked at consumer stocks and someone said they've outperformed everything else in this roaring bull market, which made me think, so all of the benefits have accrued to the shareholders of the walmarts and the fast foods. and we've seen the disparity

widen. and i can almost -- i mean, then i come to my p senses. but i could almost see where it wouldn't be the end of the world for some of that that went to the high end. maybe they don't get 100% return on their stocks, an 80% return and some of that money goes to to the workers and then it goes into the economy. let me ask arthur why i'm wrong about that. >> no, that's not wrong. and jared is very sensible at this. i appreciate a lot. it's, you know, if you have a little minimum wage increase, you get a little impact on the economy. but that's not the real problem. this is why i want to ask jared. i'd like to ask you to react to the asymmetric impact problem. even if you have a little bit of an impact, it's not spread out uniformly across the labor market. the data clearly show the people thrown out of work and people who can't find work are the most marginalized workers, the poorest people, and the people who get the raises and retain their jobs are people in upper income households who are seconda secondary earners. how is that a good policy to

help poor people when they're disproportionately impacted? >> well, first of all, i don't necessarily agree with every point you just made, although, certainly there is evidence that as i said earlier, the increase in the minimum wage, nose who say it has no impact on jobs are not correct. it's just that even if someone loses hour, they might not lose their job. they might find their hours cut. but with the higher hourly wage, they can actually end up coming out ahead. there's also a great deal of turnover in the low-wage job market. another thing that's been found is when people are displaced, they're quickly working again. one thing we found, arthur, and this has been a very strong finding is that when the wages of low-wage people go up, either through mandate or better yet, better yet, you and i would agree through a very tight labor market, say in the latter 1990s, we have a strong antipoverty effect. and this is something that a guy like you and i should agree on

because really what it's telling you is that a strong employment economy is the best antipoverty tool there is. >> jared, i want to ask andy to comment on a piece of the joe equation he put out there. can you take money from walmart shareholders and give it to workers? is that the way the economy works? >> i don't think it works that way automatically. certainly if you -- if you raise the minimum wage, it's going to have -- there are going to be winners and losers. some of the winners will be people who retain their jobs and get paid at a better rate. losers might be consumers who pay more for product than they otherwise would've. losers might be investors or business people who find their profit margins squeezed. you know, in the world of public policy, almost all policies have winners and losers. this is just another example. >> jared, there's also evidence that one of the things that happens is that companies choose to automate when you raise the minimum wage.

there is a study that shows this drives automation at the low end and you see that at the checkout counters when you see, basically, low-wage clerks. >> mcdonald's is testing. >> being replaced by sophisticated machinery. >> right. so, first of all, that's not just in the low-wage sector. >> it is also in the low-wage sector. >> it is also -- >> you expect somebody to spend a lot of bucks for -- >> and, steve, it should be in the low-wage sector and it should be in the middle and high-wage sector, as well. the problem i have with that argument is it suggests the following. let's -- it's sort of what i call a mexico or a third world strategy. let's keep wages low enough so we can disincentivize capital. i think we should allow the market to set wages broadly, except for in the low-wage sector where there's really a market failure where wages are set at a level, too low, as far as say congress, the general american public since 1938 when

we had a minimum wage. that's the reason. we just won't allow things to shove wages so low that people have to live a wage when they're trying to earn a living. as we have more older and highly educated people in that sector. >> if you had a perfect system in a test tube, though, and it's not that way, it just seems to me, if you can find someone not working that is willing to work at whatever the market price is, you can fill enough jobs that you want, it seems like, you know, if you're true to economics, it seems like you would never set anything. you'd want the market. >> this is an idea that says -- >> and the other thing, jared, is it not this simple? a company can either have 100 people at $8 an hour or 80 people at $10 an hour. >> it's definitely not that simple. let me respond to both of those. i thought it was gary who gave a good list of the way that minimum wages -- the increases

tend to get absorbed. and that's why, joe, your second point i think is wrong. he talked about profits, he talked about prices. there's also efficiency gains. clearly, the absorption mechanism isn't just on the employment margin. that's why we get those results i've been describing through our discussion. your first point, oh, your first point was about sliding down a demand curve. that is if you went all the way down to 50 cents an hour. you know, perhaps there's a lot of people we could employ. that gets back to my point a second ago. this is not the third world country. we're not going to ploy people at 50 cents an hour. now, interestingly, and i wonder what arthur thinks about this. if we were going to do that, the only way it would make any sense at all is to have a very, very significant subsidy on top of that, an earned income tax credit of multiples of what it is today. >> that's the next thing i want to ask you. i'd like you to come up with a policy you can recommend to president obama on the air right now that would be better than

the minimum wage. because recall, 40% of unemployed people today are long-term unemployed, disproportionately in the bottom 20% and those people will be hurt by minimum wage increases. but you and i agree that minimum wage people could make more money to support their families better. what's a better policy starting right now that president obama should be talking about instead of what he's doing, which is hurting poor people such they can make more money no matter how much it costs. >> look, just to be clear. i like the question, but i don't agree with the premise. i do think a moderate increase would help. to answer the part of your question that i agree with, here's what i think he should do. the earned income tax is a very important pro work subsidy. this is a good way to help low-wage people. but for childless adults, adults who don't have kids, it's rea y really -- i would increase the childless adult part of the earned income credit so that single folks can make a decent wage, as well.

>> so you -- will you acknowledge i didn't set you up, bernstein? >> not only acknowledge that, i'm ready to give you a hug. >> okay. >> i'm ready to do that to you too. >> all right. man hug. little man hug action. >> where are you? >> i'm in d.c. i'm not willing to come up to jersey to give you a hug. >> that could take a while. and you can use my -- some of that data. the consumer stocks are up 100%. and we know that the fed inadvertently and the democrats love qe, but inadvertently they've added to the income disparity because all the rich people with the assets are the ones that are benefitting. so instead of 100% return on walmart, maybe 80%'s good enough. >> if i could make one tiny last point on that. but gary made a point that i really liked and one i try to make myself. the fed can do a lot, but the fed is not all powerful. >> it's backfiring a little bit at this point.

>> bernstein -- >> thanks, jared. >> thank you. >> camera hug. anyway, arthur brooks and gary stern will be with us throughout the show. >> steve? >> coming up, we wrap up our higher learning series with the president of georgetown university. his thoughts on the changing education landscape and why he feels the campus is a necessity. and looking for some weekend reading? the latest edition of "the talking squawk blog" is up. go to squawk.com. get the scoop on our higher learning series. are trading opps tdd#: 1-888-648-6021 just waiting to be found. tdd#: 1-888-648-6021 at schwab, we're here to help tdd#: 1-888-648-6021 bring what inspires you tdd#: 1-888-648-6021 out there... in here. tdd#: 1-888-648-6021 out there, tdd#: 1-888-648-6021 there are stocks on the move. tdd#: 1-888-648-6021 in here, streetsmart edge has tdd#: 1-888-648-6021 chart pattern recognition tdd#: 1-888-648-6021 which shows you which ones are bullish or bearish. tdd#: 1-888-648-6021 now, earn 300 commission-free online trades. tdd#: 1-888-648-6021 call 1-888-648-6021 tdd#: 1-888-648-6021 or go to schwab.com/trading to learn how.

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all right. let's take a look at the futures, after five down days for the market, the futures are looking stronger this morning. dow futures indicated up by about 60 points. nasdaq up by 12 and the s&p up by 6 1/2. this is all coming after better than expected adp numbers for jobs this week. we'll get the real number coming for the government. when we come back, we'll wrap up our higher learning series with the president of georgetown university. and then it's jobs, jobs, jobs. that november jobs report is on its way. we'll have full coverage, predictions and market reaction. also, celebrating the life of nelson mandela, the south african leader was a crusader

for human rights and one of the most influential leaders of our time. we remember his accomplishments and talk about his legacy.

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welcome back, everybody. all this week, we've been bringing you "squawk box's" higher learning project. we are putting the education system to the test, bringing together some of the brightest minds that are leading the charge to disrupt, innovate and reimagine the way we learn. we're wrapping this first week

up with our series with the president of one of the nation's oldest catholic universities. joining us now is the president of georgetown university and, jack, thank you so much for being here. >> becky. >> all week long we've been talking to disrupters in this field. people moving courses online, coming up with colleges trying to get accreditation, ways to bring more people in. you represent the education system the way it stands right now. you have to be looking at all these disrupters and finding a way to change. >> we're engaging with many of them and one of them yesterday, and part of the edx consortium. how do we best ensure what we value most about traditional higher education in the united states while taking into account the opportunities that are present with these new -- with these new technologies and new opportunities. >> and what is that?

what are the things you value most, things you're afraid we might lose. >> well, if you think about higher education in the context, there are three interlocking and mutually reenforcing elements that have characterized our tradition. first, we're fundamentally responsible for the formation of young people. second, we provide a context for the inquiry, the scholarship, the research of our faculty. and then third, wherever we're located, we're responsible in some way for the common good of our community. that could range from job preparation to regional economic development. and if you look across the sectors of higher education, every one of those sectors, whether it be in the community college, the big publics, or the privates, those three pieces are always present and they're reinforcing. we want to hold that together while recognizing the need to adapt and adopt in this present. >> one of the reasons we're looking at this as a crisis point is because how rapidly college tuition levels have been

rising. i looked at georgetown levels, looks like about $44,000 this year in tuition if you include fees, room and board, books, close to $62,000. >> that's right. >> that gets to a point where it's out of grasp for the vast majority of americans. >> well, the question we've always wrestled with is affordability and how do we ensure affordability? georgetown is one of a group of private institutions that is need bound. when you apply to us, we do not take your ability to pay as a factor in the decision we make to admit you. and once you're admitted, we're committed to helping you meet the full cost. we ask that you borrow, we also are committed then closing whatever gap that might exist between what your family can afford and what it costs to be with us. that costs us about $100 million a year this year. about half of our students will receive about a third of the cost of education to be with us. >> but georgetown aside, if you look at state universities, the costs are escalating rapidly.

>> the biggest crisis we face as a nation right now is in the publics. 80% of our higher education is taking place in the publics. and if you look over the course of the last generation, the level of investment in our publics as a percentage of the higher education costs has declined by half. and so what we have -- >> over what period of time? >> over the course of the last generation. if you look roughly mid to late 70s until now was roughly 60% of the overall costs as being met by states and now roughly 35%. and in some states, it's been even more acute. the state of california which has been the home to the greatest public system the world has ever seen. you get a 65% decline overall in state support for those institutions. >> there's also the question, though, of what the universities are spending that money on. it's not just declining state support, it's also a variety of issues that money is being spent on that doesn't go directly to the undergraduate development. >> again, there are pieces of the puzzle that all need to be

present. and that piece that -- that second piece i mentioned, the support of scholarship research inquiry, that is a part of what makes us and part of what makes undergraduate education so important. i think -- >> jack. >> yeah. >> you said something at the break. i don't know if you wanted to say this publicly, but i didn't know so i'm going to ask. the basketball program. >> we break even. >> how can that be? >> the great georgetown basketball program. >> thank you. >> you're paying those players too much. >> no. >> i'm not going to go there. >> one of the great myths, it generates lots and lots of money for lots of institutions. only within the last few years -- and it's primarily due to new media rights being paid for, essentially for the five major conference football programs. you now have football programs in a position where they are generating more revenue than their expenses.

if you went back about ten years, probably would've found three programs generating positive revenue. now it's probably more like 30. but that's a small number overall in the universe. >> is there a reason it's the most popular -- maybe duke is more popular than georgetown? >> i think you were right the first time. >> i'll take. >> i think syracuse is the best basketball program. >> do you have trouble talking to people that have -- >> i had a high school education. but there two kinds of people in the world, are there not, that are fortunate enough and those that are not fortunate. you've been there for 12 years. >> well, 13 as president, i've been there 38. i came as a freshman. >> how long are you staying? i have a 13-year-old and an 11-year-old. >> i'll keep that in mind as we go forward. >> sounds like he's implying right now.

>> it's not too late. >> yeah, absolutely. >> yeah, absolutely. >> so i have a question for you. i have a very nontraditional college education. dropped out of college when i was 19, dropped out, kicked out, splitting hairs here. i didn't finish college until i was 30. and i had no demographic characteristics that would've made me remotely interesting to georgetown university. no money, no savings, no healthcare, nothing. i ended up at a place here in new jersey called thomas edison state college, the second biggest in new jersey, it's a correspondence degree. i got my whole degree when i was 30 for $10,000. my whole college degree in $10,000 in today's dollars. i'm not suggesting that georgetown university needs to serve -- let's call me a loser -- you don't have to serve me. but what can georgetown and syracuse and a lot of other great private universities do to serve more people who are underserved? >> sure. sure. >> two points and i want to come back to your experience, but in answer to your direct question.

what we've done is built pipelines with schools that are providing opportunity in the fourth quartile. in the lowest socioeconomic status. the new exciting set of schools, 25 across the nation, first one established in chicago in 1996. we have 51 students at georgetown right now. we do a summer institute for rising seniors. we're doing the same with kipp schools, we have theater programs within the state itself. it's very institution by institution building those relationships for feeding the institution. but your story's an american story. >> yeah. >> and one of the things i'd say about innovation and disruption and the like, understand that the elements of higher education, if you begin with the community college, the liberal arts college, the university, then the public land grant. these are all american

inventions. >> you were in barcelona on this symphony orchestra. >> college education, right up there. right up there with the minimum wage. something we've got to talk about forever. coming up, more on the passing of nelson mandela. it is jobs friday. we're getting ready for the numbers and the latest forecast just ahead. americans take care of business. they always have. they always will. that's why you take charge of your future.

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this is a special report, the government's employment report a mere 30 minutes away. plus, what the most recent economic numbers mean for the fed's next move. charles plosser joins cnbc to talk jobs and the taper. an hour long presentation of "squawk box" begins right now. welcome back to "squawk box" here on cnbc, i'm joe kernan along with becky quick and steve liesman. andrew ross sorkin will be back on monday. our guest host this morning,

gary stern and aei president arthur brooks. we have a full panel of strategists and economists ready to join the jobs conversation. in a minute, if you're playing along at home, set your watches to the countdown clock at the bottom of the screen. the consensus for today, 180,000 nonfarm payrolls. did that go up after adp, liesman? >> that did not because they didn't survey again. >> oh. >> there were some guys who raised it. but that actual consensus remain the same. >> and we now know that adp actually -- >> went up a little bit. >> moved the dial by 5,000. >> thought adp might be better because they do the work involved. >> as opposed to the government. can you check that post again? what is the guy doing? >> rainy morning and he looks up, i don't think so. yeah, they're working. he talks to his supervisor. you sure? yeah.

like the cable guy. pictures of cable guys asleep in the home where, anyway. but before we talk jobs, we have a round-up, not for comcast, we have a round-up of the morning's other top stories. and the big one they've been talking about all morning long that isn't necessarily on economic terms. >> certainly gives you some lessons about an evolution in economic thought. we, of course, are talking about nelson mandela who the world is mourning today. the apartheid icon died yesterday at the age of 95. world leaders, politicians, celebrities and public figures across the globe are paying tribute to the antiapartheid activist. >> through his dignity and unbending will to sacrifice his freedom for others, he moved all of us. his journey from a prisoner to a president embodied the promise that human beings and countries can change for the better.

>> in a statement, former president george h.w. bush said mandela was a man of tremendous moral courage who changed the course of history in his country. the dalai lama sharing his thoughts. >> at this moment, firstly, very sad. but at the same time, the certainness -- other people who have the sense or feeling, then we must translate that sadness, translate into determination. we must continue so his spirit is very important. >> celebrities expressing their sentiments. oprah says one of the greatest moments of my life was to be invited to his home and get to know him. he was everything you ever heard and more. humble and unscathed by bitterness and always told a good joke. being in his presence was like sitting with grace and majesty at the same time.

he will always be my hero. in just a few minutes, we'll have a live report from johannesburg. first, though, the other big story we're following today, and that is the jobs report. now less than -- where's our clock? 26 minutes, less than 30 minutes away from the jobs report. joining us now mark zandi, christian weller at the university of massachusetts in boston, and austan goolsbee is professor of economics at the university of chicago school of business and former chairman of the council of economic advisers in the obama administration. our guest host this morning has been gary stern, continues to be, former president at the federal reserve bank of minneapolis where there's a lot of lakes. and arthur brooks, president -- aren't there? >> yes, there are. >> and arthur -- i knew i had that right. arthur brooks president of aei.

>> nailed it. >> american enterprise institute. >> american enterprise institute. >> for young enterprisers. all right. you want to? >> i don't want to take your jobs report away. let's start with mark zandi. what's your number today and why? >> 200,000, it should be a strong report, unemployment should fall to 7.2. i don't think the trend has changed, though. we've been getting 175,000 per month for about three years, i think that's roughly where we are. i don't think we've broken out yet. i think we need stronger gdp growth. and even though we got a good q3 number, we're still growing 2%. i don't think we have enough g the, p to create more jobs. >> jerry, put this in context. let's say we get another tickdown. >> i'd pick march. i think the -- i think the fed is on course to taper. in fact, i would urge that they

make a statement that the ingredients are in place to begin to taper. they'll never be an ideal time in the sense that everything is fully aligned. if you wait for that, you'll wait forever. i think conditions are right. however, i don't think they're going to do it before march because the uncertainty surrounding fiscal policy, which was clearly an issue back in the fall remains an issue. the debt ceiling issue is unresolved, the funding government issue is unresolved. you wouldn't want to change monetary policy in a meaningful way in the face of that kind of uncertainty where it could obviously come back to bite you if there were major disruptions or interruptions in the budget arena. so, you know, the fed is in my opinion on hold even though the ingredients are in place for a taper. >> arthur, we haven't had your thoughts at all on fed policy

this morning. and my guess, you have several and they're considerable. >> well, i understand why we've been doing what we've been doing with quantitative easing and worrying about the taper, et cetera. but there's an underlying current of concern we ashould b concerned about what this is doing. blowing up the stock market the way we have been with monetary policy. it doesn't have real concerns for all of us about what this means, for example, income inequality. one of the things we were talking about earlier is the big discussion of minimum wage. a huge deal to bring up the poor. but one of the reasons the poor and rich are being pulled apart is because 81% of stocks and mutual funds are owned by people in the 10% of the income distribution who are getting a welfare benefit by the fact that the fed is -- >> hold on, arthur. maybe christian weller wants to weigh in on this. i've heard two criticisms of the fed. first is, they're punishing savers by keeping rates low, second is helping the wealthy by

keeping the stock market high. turns out people who own the stocks are the wealthy. so which is it? >> the savers can be the people who are living on pensions. >> they could also be stockholders, becky. it's the predominant savers are wealthy. >> which is it? let's get christian weller on this. is the fed hurting the wealthy or helping the wealthy? >> well, i think this is sort of a mixed bag because on the one hand, you see a rise in the stock market but also helping the housing market recovery and that's much more of a middle class issue here. but in the end when it comes to sort of the middle class and lower income groups, the monetary policy doesn't really need to do -- it doesn't do what it's supposed to do or policy doesn't do what it's supposed to do and that is strengthening the job market in order to really address the inequality issue, you need to have fiscal policy, regulatory policy, like raising the minimum wage, but you need stronger growth, especially in the labor market. and monetary policy is the only

game in town. and we have seen over the last few years that is not enough to really bring job creation beyond the 200,000 mark. >> certainly not with the fiscal drag, right? that's been a big part of the story. >> that's certainly -- and that's exactly the story. we now need. keeping a weary eye on the fiscal side and we're crossing our fingers we're not having another nail biter. that's the low threshold. we need fiscal policy makers to focus on what a pro growth budget that invests in infrastructure. >> don't shake your head, kernan. >> hey, austan, you ran how the administration approached. i finally sort of understand this. >> more powerful every month. i love it. >> the democrats, the democrats love qe and then when does cause the income inequality, it gives

you the opportunity to point to the greedy republicans for keeping the money in the top 1%. it's a pretty fancy trick you did there. >> well, you know, they've been keeping the -- the greedy republicans have been keeping it there for a long time even before qe started. you know, when i hear this stuff about the fed, within the fed, all of their thought has been how little direct impact they're able to have. they would love to have the kind of power that is alleged to them to increase the stock market, to increase the economy, et cetera. i think their actual incremental effect has been relatively modest. kind of like my mom when i was a kid had a toy poodle and my dad liked to call it killer. just be careful for killer. he'll be there. and with the fed policy, the fed is doing what they should be doing. i just think we got to keep our

eye on different parts of policy. >> i disagree -- i disagree. i really think qe had a big impact. you can see that this summer, right? as soon as we talked about tapering qe and interest rates rose, they rose a lot. and they did damage. i mean, look what happened to the housing market, and that's because of qe. so qe -- that's evidence of qe. >> i think you've got to division -- let's call it a distinguish between tapering and tightening. so if the fed starts raising interest rates. and i think what you saw in the summer was some confusion about does this imply that the fed is going to start raising rates a year earlier than the market thought they were going to raise rates. that clearly matters. but on actual tapering when they've engaged in qe, it's had only modest impacts, the announcement they were going to start it and the actual starting of the policy. both of those have had relatively modest impacts. >> goolsbee's not a candidate for the fed.

there are some people at the federal reserve who believe they were responsible for helping the country out of recession. >> we're not disputing that. >> the fed's policy has had a positive wealth effect. but to confound that with the fed being responsible for income inequality broadly, i think, is a big mistake. and that has a lot more to do -- >> but the margin -- >> at the margin, it may, but it has a lot more to do -- >> by definition they're wealthy. >> but it has a lot more to do with things like drop outrates. >> why are they any more wealthy than the people who own stocks? >> you believe qe mattered to the economy, it helps everybody, even the grandma who is 80 years old. >> if the economy had suffered, it would have been much worse. bernanke says it would have been much worse for everybody all the way around. >> hold on. everybody's talking at once. >> sorry. >> should i go to break, guys? >> i think the point is on the

one hand, the federal reserve -- >> let me go to break. much more, we'll come back. you can be first. much more on the economy still ahead. we prepare for the jobs report, we are looking at the clock. the world is mourning nelson mandela today. live report from south africa. plus, robert johnson joins us to talk about the icon's legacy, everything from politics to capit capital. ig... then expanded? ♪ or their new product tanked? ♪ or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade. to help secure retirements and protect financial futures. to help communities recover and rebuild. for companies going from garage to global.

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welcome back, everybody. tributes coming in from around the world this morning as nelson mandela is mourned. michelle kosinski from south africa. michelle? >> reporter: hi, becky. zuma left the mandela home. as he was leaving, he talked to people here. but didn't give any sense of what the plans for the funeral will be. said he will know those in a few days. there's been this endless procession of people around the clock since last night when mandela passed away. we've seen young and very old, black and white, many of them carrying flowers. the air has been just full of that deep resonant rhythm of african songs. one elderly woman told me that remembering apartheid makes her

so sad but mandela saw a big light and never switched it off. it's possible that the first big public event, a memorial service won't be until around tuesday. in a stadium that holds more than 90,000 people. in fact, that was the same place where mandela made his last public appearance for the world cup back in 2010. and it's possible that his state funeral won't be for a few more days after that. expected to be attended by many world leaders in his remote hometown. becky? >> michelle, thank you very much, again. that's nbc's michelle kosinski joining us. joining us right now is robert johnson. he's the founder and chairman as well as the cnbc contributor. and robert, you knew nelson mandela. how many times had you met with him? >> yeah, i had the pleasure to meet with president mandela probably five or six times over the course of being in africa.

we raise multimillions of dollars through a telethon for president mandela. and he was certainly, obviously, a giant of a man in the fact he did two things that most people never do. one, you forgive your captives in a way that brings about reconciliation. and the second thing he did from an economic standpoint, he understood you simply couldn't confiscate all the white africans' assets and turn it over to blacks which many people thought he should do, including people in south africa. but he recognized that south africa was both going to be a democracy and a free market economy. and that's the unique nature of his leadership. it was not just being a revolutionary, it was also being a leader of the largest economy. >> we spoke to sir richard branson this morning and he talked about having met nelson mandela, as well, and basically when you went to lunch with him,

you knew it was going to be very expensive. you were not going to get out of there without writing a check or agreeing to sue something. >> well, he had a great pitch for raising money. i remember we'd put together a group of black business people when he came over to new york up in harlem. and he was asking us what our contributions were. and at that time, we were talking about, well, we'll help you with marketing on this and we'll help you at advertising on that. and he went into his spiel. he said, when i went to libya, gadhafi gave me $5 million, when i went to the ivory coast, the president gave me $7 million. you know, so i don't need advertising, i need millions. so he was a fundraiser. and he had that kind of sense of humor that almost made it impossible to say no to him. and because you knew his cause was so great and his belief in the rightness of his cause, you had to respond to that. but he had a tremendous sense of

humor and almost a mischievous sense of humor. that made him human at the same time iconic. >> we talked about it earlier trying to get our -- at least i am, my arms around how you go from a marxist, really, when i think he went into prison. and i think had the idea or would probably nationalize all of the industry in south africa initially. and then it was 27 years and he got to the wise old age of 71. when do you think he turned into the free market advocate? he talked about a lot of world leaders, too, but that doesn't -- that revelation doesn't come to everyone. i mean, there's a lot of marxist leaders that stay marxist leaders their entire lives. >> well, i think the first thing i got the notice, he was going to do that. he had a great adviser who was head of the finance arm of the anc and also later became head

of finance for the country who recognized that south africa had to maintain its integrity as a free market economy. and you simply couldn't give away all of the wealth and turn it over to the black south africans because in many ways they weren't prepared. you couldn't take the gold mines and turn it over to the miners. his idea was a little bit a form of affirmative action and a form of a policy called black participation in that blacks were invited to join the boards and become shareholders under a process of many of the large state-inspired companies. so he -- he was clear that the -- that a free south africa without the respect of the global marketplace in the free marketplace wouldn't be in the

best interest of black south africans trying to move into the middle class. and i think he came to that very early on as he transitioned out of being a prison and head of the anc to president of a nation. >> robert, thank you very much for joining us this morning. and sharing your remembrances. we really appreciate it. >> thanks, becky, we'll see you guys. >> all right. see you soon, hopefully. coming up, the november jobs report minutes away. and then our news maker of the morning, philadelphia fed -- along with our other news makers, president charles plosser live at 8:40 eastern. [ male announcer ] the parking lot helps by letting us know who's coming. the carts keep everyone on the right track. the power tools introduce themselves. all the bits and bulbs keep themselves stocked. and the doors even handle the checkout so we can work on that thing that's stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. so everyone goes home happy.

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teen retailer american eagle outfitters getting hit hard this morning. the company matched street estimates with the third quarter profit of 19 cents a share. but well below what the street had been expecting. the ceo robert hanson says the company's financial performance is unsatisfactory and it's trying to navigate its way through an intensely promotional environment. we've seen a lot of retailers that have had trouble with this. a lot of blow-ups over the last week or so. when we come back, it is arguably the most important economic data release of the month. the november jobs report a few minutes away. but first, weekend reading for you, the latest edition of the talking squawk blog is up, go to squawk.cnbc.com. get the scoop in the higher learning series. plus, the latest word on the jumble update. i think we're tied this week.

i think we're tied 2-2. plus, there's a whole section about steve liesman's groupies and a way that you can -- you can apply to be a groupie. >> you don't need to read that. >> the google party, and why joe enjoys wearing a kit. talking squawk, squawk.cnbc.com. twins. i didn't see them coming. i have obligations. cute obligations, but obligations. i need to rethink the core of my portfolio. what i really need is sleep.

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welcome back, everybody, we are awaiting that employment report for november. we've been watching to see what happens. expectations are at least from the market that you will see about 180,000 jobs created. unemployment rate is expected to drop to 7.2%. we've been watching the futures and they have been stronger throughout the morning. you can see the dow futures up by about 66 points. that's just off the highs of the morning. but still, looking very strong. >> people have been telling us all week, the market wants good news, but that's not what we've been seeing. >> we want good news. >> we want jobs. >> the market reaction, what is the knee jerk reaction of the market. >> i don't like those guys anymore. the main line, the drug, the qe drug. >> if we look at the ten-year, you've got to figure the bond market has figured out, we're getting to the point where we

see a taper. 2.884%. we're watching this closely because, again, the bond market probably will set the tone for the stock market. that's certainly what's been happening in recent weeks. again, we are waiting for that number. and the expectation is for 180,000. hampton pearson joins us right now from the labor department with those numbers. >> up 200,000, november nonfarm payrolls increased by 200,000 jobs. the unemployment rate is 7%. average hourly earnings up .2%. the net revisions between job games between september and october, a net increase of 8,000 for the two months above what had previously been reported. private sector job growth, plus 196,000 november job gains across the board. professional and business services, up 35,000, transportation and warehousing, 31,000, manufacturing, plus 27,000. that's the best monthly increase

in manufacturing by the year in well over a year since march of last year, as a matter of fact. construction plus 22,000, job losses, the federal government down 7,000. so, how did we get to that 7% unemployment rate? this is, again, going to the household survey. the labor department says the number of unemployed fell by 365,000, a big part of that was due to the return to work of those federal workers laid off during the temporary government shutdown. workers going back to their jobs. the labor force also increased by a total of 455,000. when you add it all up, the labor department tells us that we had a total increase of 818,000 in the month of november in the number of persons employed. that is the biggest monthly increase in nearly 30 years. looking at some other numbers, labor force participation rate, 63%, up slightly from october at

62.8%, with revisions, job growth the last three months averaging about 193,000 jobs. back to you guys, a lot to chew on. >> thank you very much. we should tell everyone, again, the jobs rate was 203,000 jobs, 203,000 jobs, the unemployment rate dropping to 7%. that drop to 7%, what's that telling us? >> that's obviously very good number. just a quick assignment to steve, what was hours worked? hourly earnings? >> 35.4 -- >> this was a strong report. >> i want to tell you how we got there. but the numbers are -- i mean, not quite a reversal, but they're as stunning in their size as they were last year, last month. the workforce in the household survey rose by 455,000. after dropping by 720 in october. the number employed rose by

818,000 after dropping by 735,000 last month. and the unemployed dropped by 365. so these are -- >> what the heck does that mean? >> well, it tells you why economists like the payroll data better. it's less volatile. but this is the number that give us the unemployment. i'm not sure i believe -- >> here's an interesting point. if we're growing, say, 175,000, 200,000 per month where the stable labor force participation rate, we need 125. if it's stable, at this rate of job growth, you're going to see unemployment decline in a consistent way. in fact, at 200,000, you would get a decline in unemployment rate over a period of a year about .5 percentage point, that's what we're getting. >> now i guess your number was 203, right, austan? you've been bearish. >> i was going to be below mark. he hit it on the nose on this one. but i think the thing is with this strong report following several months of strong reports, i think if they come up

with even some embryonic stem cell of a grand bargain -- >> yeah. >> -- which is to say that's not a grand bargain at all, but just some kind of budget agreement, i think you'll see the fed now really start moving into -- >> i'm going to say the embryonic stem cell -- >> we'll get to christian. go ahead. >> christian, give us -- >> i would add to austan's point if there's even a budget deal hopefully next week, that could really spark substantial growth by removing a lot of the uncertainty that businesses have been operating under and really free up a lot of business investment. a strong report, a good basis to grow from. and i think if leaders in congress take the serious come to an agreement, get the debt ceiling off the table. i think you can see the real economic growth being unleashed, the job market growth being unleashed. >> and the futures gave up a little bit of ground.

>> has to really increase the market sense of when the fed will taper, how much they'll taper, and the speed of tapering. christian, do you want to take a crack at what that means for the timing here? >> i think the fed will probably take one more month of data to have three months of decent data to start really indicating they're going to clearly taper. there was earlier made a point that we still have the fiscal uncertainty hanging over our heads, again, i think the fed will wait until at least next week to see whether we get the budget report from the conference committee. and then we're also going to see whether there's going to be resolution with a budget and with a debt ceiling coming up in february. >> gary, you want to take a crack at that question? >> yeah. i think as i said earlier, i think the budget issue is still on the table. but the fed has to be very pleased with this number. and with the recent series of numbers. it's clearly positive, especially in a world where there's been fiscal drag we've all talked about. so as i said before, i thought

the ingredients are in place for tapering. i think that's the case. i think if we can get some of the budget uncertainty behind us, they will go ahead. i think the stars are aligned appropriately. >> you don't think that's december, though? >> no, i do not think it's december. >> is it still only 10? could they do 50? >> i don't think they'll do 50, i think they can do more than 10. >> and in the grand scheme, i'll tell you what the fed thinks about this. december and january, doesn't matter a hill of beans to them. >> yeah. >> talk about the sort of broad themes of monetary policy, it's not that relevant. you want to give us your thoughts on the jobs number? >> yeah, obviously better, 7.0 is better than 7.6. we want to look at the employment number around 63% which is as low as it's been since 1979. >> again. >> yeah. again. this is really not good. and one of the things we're not looking at is what the labor department calls u6, underemployment and involuntary

part-time employment. and that looks at the misery in the economy. >> feels like the participation rate is stabilizing. if you look at year-over-year labor growth -- >> we're at a four-year low. i hope it's finally stabilized. >> you're right. it's good news. >> and we're in the fifth year of the recovery. we've been waiting for some of these improvements for a number of years. the fact we're getting these declines in the context of the labor -- >> we had one point decline in the month of october. >> it's probably related to the government -- that's october, right? >> yeah. october. >> throw that out. one point about the market reaction, if we go back three months ago and got this jobs number. >> freak. >> it would have been down a lot. i think the market is beginning to -- >> adjusting. >> yeah. adjusting. >> yeah. >> all right. what about the ten-year? >> it was 2.9 a moment ago. let's see if we can take one

more quick look at it. 2.917 for the ten-year. >> is rick off today? >> yeah, i don't think we'd go that long without hearing from him. >> he would've insisted. >> mark, thank you very much. christian, austan, thank you for your time. arthur brooks and gary stern will be with us for the rest of the show. >> well, that report one of the last major data points before the final fed meeting of the year. we'll talk to charles plosser about the economy and what looks more likely now, the risk of a taper. "squawk box" will be right back. the american dream is of a better future,

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welcome back. somebody is not on vacation. rick santelli is here. you know what, no one's going to argue with you now, rick. >> i apologize, rick. we're very sorry. >> oh, i'm sure you're sorry. that's all right. i was busy! i was on with the census workers' boss in the white house seeing how coordinated this number may have been. >> i will always give you your say, rick. we thought you were on vacation. you go. >> is this april? hey, what's today's date? is today april 1st? i didn't realize that. all i can tell you is let's get to the market, the only consensus bureau i like to watch. we did get up around 293, 294 briefly. we've slipped back very close to unchanged under 290. and there is a difference and

the table did bring that up. the equity markets and preopening futures which aren't an indicator that is the market. you know, you buy or sell, you get a check, it's up 100 plus. that's not fair value. that's just the raw dow futures. they've doubled since the number and there's no doubt in my mind, there's going to probably be some selling in equities and some more selling in tens. we've thrown out a big billboard that shows some consistent job growth, real or memorex. we've seen the participation rate hold at these lows. the l be a learning experience to see if the marks are grown up enough in equities to deal with the reality that our economy is probably three years into a noncrisis mode. >> rick, is the two-year or any other indicators out there telling us that the market is bringing forward the date of the

fed raising rates? >> you know, steve, i'll tell you what, i know that we all want to look at the euro/dollar option curve or the fed funds curve, but i think that's very difficult to extract when you're at the fulcrum. i think once a process begins of snugging up or we've turned some corners, that'll change. i think i would look at probably the twos to tens, fives to tens, all the various yield curve trades. but maybe most importantly, knowing that the big bond boys are long fives. i would continue to watch fives. fives start to get much higher than about 165, i would think they're pulling that tightening forward. >> we are all so glad you joined us this morning. >> we should've known he wouldn't abandon us on a jobs friday. >> steve thought he was at the pool hall. >> i've never missed one. >> thank you, rick. when we come back, charles plosser. to help secure retirements and protect financial futures. to help communities

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let's get down to jim cramer at the new york stock exchange. and -- see, i think it's starting to work, jim, where people are finally listening about -- you know, you don't need the guys that want every last dollar of qe. you need some people that actually want the economy to

take the mantle and they're not all short-term. maybe the market stays up today. what do you think? if we go to 295 or 300, maybe it doesn't, though. >> i'm sure there's some sort of program, some algorithm that says when you get to three, you have to sell even if you like it. that's something to deal with. look, joe, these are good numbers and other than the retail business which is as we know promotional, you're seeing industrial, auto doing very well. this shouldn't necessarily kibosh what's going on in housing. we're a best generator of jobs in the developed world and i think it's important to recognize a lot of earnings are going to come through simply because these numbers are that good. >> i just -- you know, we had the discussion the other day and we talked about the american dream and how kids getting out of school these days. it's, you know, the companies that used to employ you for life aren't there, the benefits aren't there. everything seems so different. and it reminds us of the late '70s. and that was morning in america again.

and now we're hearing it's never going to be again. i wonder if we did 3%, 3.5% and we did have, you know, manufacturing resurgence whether it's energy related or whatever. five years from now, could we be saying, god, what a great place, kids getting out of school, there's jobs. is that possible? i'm almost with andrew now. maybe i feel like maybe that's going to be harder and harder to get back to. >> well, i think there are regions that are going to be very strong simply because we have abundant natural resources. the regions are not where a lot of people are. but there's labor shortages and a bunch of places in the country we don't talk about. >> will 3 1/2 solve all our problems, jim? if we have 3 1/2 gdp, will that solve all our problems? everything we worry about all the time? >> i think there's a tremendous number of people, and that's not going to change, i know there's a debate about minimum wage. if walmart took the wages to $20. if walmart pushed for $20 minimum wage, they'd wipe out all the small guys. nobody can do that. there's a lot of tension between

big industry which actually now is starting to favor things like carbon taxes and small industry where the jobs have to be created. and joe, we have to do something to help small industry against the rules that big industry wants to put through in this country. big industry is complicit with what i regard as being the destruction of smaller industry because they can afford all the lobbyists, they can afford all the -- >> that's worse than socialism. >> jim is completely right. >> that's what i worry about now. the smaller guy who gets troubled by what walmart wants. >> that's exactly right. >> all right. thank you very much. now we get to our newsmaker on this jobs friday. philadelphia fed president charles plosser, thanks for joining us this morning. >> great to be here. >> i guess, first question's easiest one, what's your reaction to the jobs report? big decline to 7% unemployment rate. >> it's pretty positive, clearly. we -- we're continuing to make slow progress. i don't get too excited over one month's number. but it is -- it is the -- it is

in a good direction. >> yeah, charlie, a lot of volatility in it. big jumps in household decline, declines in labor, big jumps. what do you do? do you average it and take a look at the overall payroll growth? it a look at the overall payroll growth? >> i think that's the way to do it. take a step back and take a look over the last several monies and you've got a pretty stable, positive rate of growth in jobs right now. >> we've had some up side surprises recently in the data. what's your take, charlie, in terms of how we end this year because people are saying the strong third quarter growth goes away in the third quarter but still talking about better numbers in 2014. what's your forecast? >> my forecast for 2014 remains close to 3%. i think that's where we'll be next year. it's a pretty healthy pace of growth. it's not booming but it's a

pretty healthy pace of growth. what happens on a quarter-to-quarter basis is hard to predict because they are volatile. we do know the big surge up was driven a lot by inventories and those may be quite volatile and may not sustain. >> this is a funny question to ask because i know you don't want the fed to be doing qe now. now you get a 7% unemployment rate, my guess is your answer is you really, really, really don't want the fed to be doing qe now. >> well, i was not fan of this qe program in the first place and i think that it would be a wise for to us get rid of this program. i think it has what lot of unintended consequences and risks for the economy down the road. i think it's probably a time to figure out a way to gracefully

leave from this. we shouldn't be continuing to try to provide more and more and increased accommodation at a time the economy is growing at a reasonable pace. we should be looking for ways to withdraw support or at least slow down the increase in accommodation in order to begin to let the economy stabilize on its own. >> your former colleague gary stearns here. i have a question for you about the labor force situation, in particular the participation rate. it's been the focus of a lot of attention because it's been declining significantly until recently. i suspect you and your fed colleagues have done some analysis of all that. my question is how much of that is cyclical as opposed to how much of it is demographic related? >> i think a large portion of it is demographic related in some sense. we had research done here at the philadelphia fed just recently

who looked at microdata to look at the participation rate in the last 12 to 18 months and they found virtually the entire drop in the last year has been concentrated in people moving to retirement. people who move into retirement, once they move into retirement, they don't tend to come back. i think there's a lot of downward pressure on participation rate. how to break it up and how much of it will spring back overall i think is harder to say. i think we're in a period of lower participation rates and i don't think we should be looking for those rates to rise back up to the levels they were back in the early part of the 2000s. i don't think that's going to come back. and i think it would be a mistake for policy maker to use participation rates as another target. >> last time you were here, you were advocating the notion of putting a cap on the amount of

qu quantitative easing that was out there. >> i still think it's a good way to wind down the program. what we've learned is this ability for us to fine tune our purchases is very difficult to do. as desirables that may be in a conceptual sense, the difficulty in september was we couldn't even move the flow pace at all. i think it's just very difficult. so i think we need to go back to where we were in the earlier rounds of qe where we set a total amount and then we executed that amount, we bought that purchase and then we stopped. and then we can reevaluate -- >> maybe we can get congress to vote on whether we raise the ceiling total and get them involved. we'll let the fed start using participation rate. >> get a monetary cliff going. >> we don't need anymore of this stuff. >> charlie, you have a terrific conference here today, a place where i would be if it wasn't on

the day of the jobs report. all-star cast there, greenspan will be there. give us an idea of what you're looking at today. >> the early banking was found here in philadelphia. we'll look back starting way back in the colonial era and learn a little bit about how central banking has evolved in the united states, what have been some of the challenges and particularly look at some of the episodes in the last hundred years to ask how has that shaped our institution that we call the federal reserve. so we're looking forward to it. >> really quickly, you have greenspan there. he said earlier this week he thinks bitcoin is a bubble. what do you think? >> i don't like bubbles. i don't like talking about bubbles. they're very difficult to detect, and i think that it's very dangerous to sort of get into the notion of so whether we're in a bubble or not. what we have to do from a

monetary perspective is institute solid monetary policy and if we do that, we can stay away from bubbles. >> sorry i couldn't be out there. >> we missed you, steve, but thanks for having me on. it's been positive. >> we finally had to say we're going to miss you. you were like fishing for -- they seem fine, they seem fine down there. you think someone's there that can take your place? i don't know. >> four minutes, ladies and gentlemen, and my weekend gets to begin. >> crespo, crespo. >> i was trying to be nice. >> s&p futures up by 17. the stock market has decided finally that good news is good news. we'll be right back. after this we'll get the countdown to the opening bell. m. it grabbed the patient's record before we even picked him up. it found out the doctor we needed was at st. anne's.

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guy, we are almost out of time. quick last thought on it? >> it's great news. any time the economy is going in the right direction. we can't let down and think we have suddenly won. remember this is an asymmetric

economy and we have keep our eyes on the bottom half. >> it suggests the economy is doing better, even in the face of headwinds and moves us closer to the fed's threshold number. we may get there quicker than we expect. >> thank you for joining us. it's time for "squawk on the street." >> 203,000 jobs added in november. a jobs report headed in the right direction. i'm carl quintanilla with jim cramer. david faber is off. the 10-year yield within about 10 basis points or so of that 3% at least earlier this morning and europe is worth watching as well. looking at the jobs number, as we id